Matthew Neville

Online fashion retailer ASOS styles itself for premium FTSE listing with £2.4bn valuation

Financial service specialist Hargreaves Lansdown has published research regarding online fashion retailer ASOS’ position in the market as it guns for a listing on the London Stock Exchange.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown, said: “ASOS has strutted ahead in terms of sales in the UK, thanks to high demand for the latest styles as partygoers geared up for a season of celebrating, with growth for this market coming in ahead of expectations.”

It seems dresses and sequins replaced slouchy loungewear styles as long delayed parties were planned. Bringing Top Shop into ASOS’ rail of brands looks to be paying off, after the company acquired the brand from Arcadia. Sales rose by 200 per cent, proving there is still a demand for the label and its products.

Susannah continued: “But it’s not helped boost its profit guidance as elsewhere the group is facing ongoing headwinds, constraining growth. Supply chain challenges continue to be an ongoing headache for the group and overall demand has still stayed extremely volatile due to fresh waves of Covid crashing on key markets.

“Margin declines due to discounting were expected and that is likely to continue to be a niggling cause of concern as too many red ticket reductions have been turned into a big headache in the past.”

However, Susannah argues that the brand has managed to push past such concerns as it looks to secure a prominent placing on the London Stock Exchange.

“Investors appear confident that ASOS is taking the right strategy to ride out the storm with the growth trajectory of 10-15 per cent unchanged for the year and pre-tax profits remaining on track.

“They have been buoyed by the news that ASOS is styling itself for a premium listing and plans to apply for entry to the main market of the London Stock Exchange, moving out of the AIM index. With a market capitalisation of £2.4bn, approval should mean it would move into the FTSE 250 during a period after listing.”

Susannah concluded: “The last year has been a rollercoaster ride for ASOS, originally shorthand for As Seen On Screen, and it’s hoped an admission will help erase some of the volatility of the stock and push it further into the limelight in terms of profile among investors.’’

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